Vietnam revokes license of Canadian gold miner over back taxes

Authorities in the central province of Quang Nam have revoked the license of a Canadian-owned gold miner, after it failed to pay more than VND334 billion (US$14.77 million) in back taxes, local media reported on Tuesday.

An undated file photo shows workers at Phuoc Son Gold Company, a subsidiary run by Toronto-headquartered Besra Gold Inc., in Vietnam's central province of Quang Nam

Phuoc Son Gold Company is one of two subsidiaries run by Toronto-headquartered Besra Gold Inc. to operate two gold mines with a combined reserve of nearly 20 tons in the province.

It was unclear if the province will also revoke the license of Bong Mieu, the other subsidiary, which has defaulted on nearly VND100 billion ($4.42 million) in taxes.

Since 2014 local authorities have imposed many punitive measures in vain to collect the companies' back taxes, including freezing their bank accounts and withholding their value-added tax refunds.

They also blocked the exports of the companies, which have produced a total of 6.9 tons of gold since 2005. Authorities reportedly came after their assets, but the assets had already been used as security for loans.

Facing several shutdowns over the years, Phuoc Son and Bong Mieu accumulated VND1.02 trillion ($45.11 million) in losses and recorded debts of nearly VND2.5 trillion ($110.58 million), according to news website VnExpress.

Commenting on Quang Nam's latest move, Tran Van An, vice director of the province's Department of Planning and Investment, told the website that local authorities had given the companies several chances to pay up, but they still failed to fulfill their obligations.

If Phuoc Son does not pay its back taxes in six months since having its license revoked, or propose a "feasible" plan to do so, the company will have to apply for dissolution and end its business, he said.

Small lender Viet A Bank, which acquired a 35 percent stake in the company last year, have reportedly sought permission to offer tax payment guarantee for Phuoc Son.

However, an unnamed senior official with Quang Nam's tax office was quoted as saying by VnExpress that the province has yet to consider the bank's proposal due to insufficient paperwork.